In emerging markets, the lack of talent forces HR dept to concentrate more on recruiting more people rather than devising strategies towards retaining the existing employees. Such activity leads the HR department in to becoming a recruitment office rather than the driving force behind processes and initiatives that play a crucial role of leading and steering employees.
1) High attrition rate in emerging markets ( average 33% in India) . Most employees shift jobs for higher salaries however, the money spend on recruitment, training and administrative activities is lost by the company. Also newer recruits (especially in I.T. ) companies have limited prior experience and may not be able to provide the same level of competency as the outgoing employee.
2) Disenchantment among employees within a few years of employment. A lot of employees leave the company early on as they are not able to integrate themselves within the company.
3) Lower levels of productivity and increase in bureaucracy as most of the talent stays within the company to pass time. Such people do not contribute to the overall development of the company and stay with the company as it offers a comfort zone which allows them to spend their time on non productivity activities.
Linking HR to Corporate strategy
1) Recruit correctly : Align people to company goals
A good way to ensure that the right people stay with the company is the select the right people. A company can align a part of the HR’s incentive to the tenure of the people they hire along with other measures. This will ensure that the HR takes that extra effort to not allow people with a history of switches to get in. The company cans take steps such as doing away with monthly recruitment targets to an extent, so that there are no mass recruitments to fulfill the assigned quotas.
2) Job Definition: Clearly tell people what they need to do
HR needs to know why a particular job exists, where does it fit in within the organization, what is it expected to achieve, on which areas does it effect and the nature of those effects on the organization. In addition, the HR needs to know the skills required to effective perform the job.
Once the HR is clear on what the job entails and the skills required, they are in a better position to judge candidates that fit the job. They should communicate the job description to the candidate being interviewed so that only the people who are truly interested show up.
Another aspect that HR should concentrate on is to showcase the corporate culture of the organization. If the organization believes in team work, the HR can mention that the incentives are measures on team productivity.
3) Goal setting: Help employees in goal setting
Managers need to help employees in setting and reaching goals .Employees want to know how their work is impacting the company objectives. Employees who do not see this linkage between their work and the larger company ambitions are prone to feel disenchanted.
Managers hold critical responsibility for this as a failure to meet these goals will have the consequences on the manager, employee and the organization. Hence a balanced approach towards goal setting should be followed. A manager's job is to provide 'supportive autonomy' that's appropriate to the person's level of capability." The key is to be hands-on while giving your people the room they need to succeed on their own.
It is also important to make sure that the goals are attainable and challenging. A brilliant example of this was set up by Jack Welch in GE where he asked his employees to set targets for themselves. They were asked to come up with plans to achieve the same and break down goals into individual tasks so that it becomes easier to review the progress. In GE these were called “Stretch Goals” and it helped GE increase productivity manifold.
Managers also need to come out of the professional mould and try to seek what are the personal motivations of an employee. He needs to find out what are the personal goals that an individual is seeking. For example, if your employee has expressed an interest in teaching but that is not part of his job responsibilities, you may be able to find ways to sculpt his job to include opportunities to train peers or less experienced colleagues.
4) Incentives: Inform employees what is important.
A score card concentrating on the key success parameter (identified by the company) can be implemented to motivate people to work towards a common goal. The financial incentives should be used more a support structure rather than drivers for the change. Change will need to come from the people at the trenches and we will need some agent that will help transform people.
Forming smaller teams and then linking the incentives to team productivity will help bring in accountability and with minimal freeloading. Nucor Corporation was successful in implementing a group productivity based incentive system which led to higher productivity and a turnaround.
5) Use the Bench: The bench can be productive
Most IT companies use the concept of “bench”. They hire more people with the intent to be ready to deploy people quickly once they sign a contract. The bench can be a place where people’s creativity and initial zeal is quickly eroded as they are typically not assigned work in the initial 6 -8 months of employment.
On the contrary, the bench can be made in to a revenue center and can be effectively used by allowing people “on the bench” to work across departments in the company. The resources work in the R&D departments as these are most understaffed. People with necessary skills can work on projects without billing the clients to share the work load.
6) Democratization – One of the ways the employee democratization can be encouraged is involving the employee decision making from all levels of hierarchy before making decisions affecting the employees. These decisions can vary from very simple to organizations decisions having moderately high complexity.
One of the traits most companies lack when they grow is the nimbleness/agility. This culture can be incorporated by providing more freedom to employees in their daily operations. By freedom we mean ability to try out innovative methods, instilling a sense of entrepreneurial instinct in the employees which will subsequently develop more accountability in the employees. This also involves the part where the superior should accept the concept that his subordinate is more linked to the ground realities.